06:15 AM EST, 12/31/2025 (MT Newswires) -- Flushing Financial's ( FFIC ) proposed merger with OceanFirst Financial ( OCFC ) faces "inherent deal risk" even in a favorable regulatory backdrop for approval, Raymond James said Wednesday.

Late Monday, the companies said they have agreed to merge in an all-stock deal worth about $579 million.

Raymond James downgraded its rating on the Flushing Financial ( FFIC ) stock to market perform from outperform.

The move factors in "the fair price paid by (OceanFirst) which reflects earnings challenges (Flushing Financial ( FFIC )) has faced due to the challenging rate environment for the past several years, and inherent deal risk," Raymond James said in a note to clients.

"The sale is also a positive from a long-term perspective, as the election of [New York City Mayor-elect Zohran Mamdani] will likely increase concerns about exposure to rent-regulated properties over time if proposed rent freezes occur," the brokerage said.